Open Joint Stock Company Russian Helicopters Unaudited interim condensed consolidated financial statements For the six months ended 30 June 2012 Open Joint Stock Company Russian Helicopters Unaudited interim condensed consolidated financial statements For the six months ended 30 June 2012 Contents Statement of management’s responsibilities for the preparation and approval of the interim condensed consolidated financial statements for the six months ended 30 June 2012 .................... 1 Report on review of interim condensed consolidated financial statements ...................................... 2 Interim condensed consolidated financial statements for the six months ended 30 June 2012: Interim consolidated statement of comprehensive income ............................................................... 3 Interim consolidated statement of financial position ......................................................................... 4 Interim consolidated statement of changes in equity ....................................................................... 5 Interim consolidated statement of cash flows .................................................................................. 7 Notes to the interim condensed consolidated financial statements .................................................. 8 Ernst & Young LLC ООО «Эрнст энд Янг» Sadovnicheskaya Nab., 77, bld. 1 Россия, 115035, Москва Moscow, 115035, Russia Садовническая наб., 77, стр. 1 Tel: +7 (495) 705 9700 Тел: +7 (495) 705 9700 +7 (495) 755 9700 +7 (495) 755 9700 Fax: +7 (495) 755 9701 Факс: +7 (495) 755 9701 www.ey.com ОКПО: 59002827 Report on review of interim condensed consolidated financial statements To the shareholder of Open Joint Stock Company Russian Helicopters Introduction We have reviewed the accompanying interim condensed consolidated financial statements of Open Joint Stock Company Russian Helicopters and its subsidiaries (“the Group”), comprising the interim consolidated statement of financial position as at 30 June 2012 and the related interim consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standard IAS 34, Interim Financial Reporting (“IAS 34”). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34. Emphasis of matter Without further qualifying our conclusion, we draw attention to Note 1 and Note 21 to the accompanying interim condensed consolidated financial statements, which indicate that the Government of the Russian Federation is the ultimate controlling party of the Group and the Group has significant transactions with parties, related by means of common control and ownership by the Government of the Russian Federation. Accordingly, the Government of the Russian Federation exercises direct and indirect influence over financial position of the Group, the results of its financial performance and its cash flows. 28 September 2012 A member firm of Ernst & Young Global Limited Open Joint Stock Company Russian Helicopters Interim consolidated statement of comprehensive income In millions of Russian Roubles For the six For the six months ended months ended 30 June 2012 30 June 2011 Notes (unaudited) (unaudited)* Revenue 8 60,292 42,369 Cost of sales (36,228) (25,023) Gross profit 24,064 17,346 Selling, general and administrative expenses (16,879) (11,696) (Impairment)/reversal of impairment of property, plant and equipment 10 (24) 97 Government grants 39 55 Other operating expenses, net (766) (343) Operating profit 6,434 5,459 Finance income 127 131 Finance costs (2,307) (2,019) Share in results of associates (4) (208) Foreign exchange gain, net 401 573 Profit before income tax 4,651 3,936 Income tax expense 9 (1,569) (1,229) Profit for the period 3,082 2,707 Attributable to: Shareholder of the Company 2,968 1,841 Non-controlling interests 114 866 3,082 2,707 Other comprehensive loss Revaluation of available-for-sale investments (25) – Total comprehensive income for the period net of tax 3,057 2,707 Attributable to: Shareholder of the Company 2,945 1,841 Non-controlling interests 112 866 3,057 2,707 Earnings per share Weighted average number of ordinary shares (including effect of split of the Company’s ordinary shares) 94,994,000 94,994,000 Basic and diluted earnings per share 0.00003 0.00003 * The comparative information for the six months ended 30 June 2011 reflects adjustments made in connection with the completion of provisional accounting (refer to Note 7). The notes on pages 8 to 27 are an integral part of these interim condensed consolidated financial statements. 3 Open Joint Stock Company Russian Helicopters Interim consolidated statement of financial position In millions of Russian Roubles 30 June 31 December 2012 2011 Notes (unaudited) (audited)* Assets Non-current assets Property, plant and equipment 10 40,504 38,787 Goodwill 11 1,076 1,076 Other intangible assets 12 6,253 4,797 Investments in associates 32 35 Trade receivables 478 188 Prepayments and other receivables 1,969 2,337 Other financial assets 13 150 150 Available-for-sale securities 14 877 935 Deferred tax assets 294 289 51,633 48,594 Current assets Inventories 15 27,885 25,860 Amounts due from customers under construction contracts 11,406 6,391 Trade receivables 7,937 7,475 Prepayments and other receivables 17 33,969 31,708 Income tax receivable 667 270 Other taxes receivable 8,543 6,949 Other financial assets 13 1,193 872 Cash and cash equivalents 16 10,486 12,036 102,086 91,561 Total assets 153,719 140,155 Equity and liabilities Capital and reserves Share capital 95 95 Additional paid-in capital 8,567 8,414 Retained earnings and other reserves 17,181 13,948 Attributable to the shareholder of the Company 25,843 22,457 Non-controlling interests 2,689 2,291 28,532 24,748 Non-current liabilities Loans and borrowings 19 40,069 35,142 Obligations under finance leases 276 348 Retirement benefits liability 413 370 Provisions 182 311 Deferred tax liabilities 2,590 2,400 43,530 38,571 Current liabilities Loans and borrowings 19 22,291 19,318 Obligations under finance leases 247 232 Amounts due under the Military Purchase Program construction contracts 20 15,362 13,795 Amounts due to customers under construction contracts 10,501 10,986 Trade payables 4,962 5,462 Advances received and other payables 25,300 22,950 Income tax payable 896 1,463 Other taxes payable 1,150 1,670 Provisions 948 960 81,657 76,836 Total liabilities 125,187 115,407 Total equity and liabilities 153,719 140,155 * Certain amounts do not correspond to the consolidated financial statements as at 31 December 2011 and for the year then ended and reflect reclassifications made as detailed in note 3. The notes on pages 8 to 27 are an integral part of these interim condensed consolidated financial statements. 4 Open Joint Stock Company Russian Helicopters Interim consolidated statement of changes in equity For the six months ended 30 June 2011 In millions of Russian Roubles Equity attributable to the shareholder of the Company Share Additional Retained Non-controlling Notes capital paid-in capital earnings Total interests Total Balance at 31 December 2010 95 8,414 12,084 20,593 9,594 30,187 Profit for the period – – 1,841 1,841 866 2,707 Other comprehensive income dividends – – – – (426) (426) Increase in ownership in subsidiaries: OAO Kazan Helicopter Plant – – (1,701) (1,701) (2,672) (4,373) OAO Rostvertol – – 168 168 (1,217) (1,049) OAO Arsenyev Aviation Company PROGRESS – – (244) (244) 388 144 OAO Kamov – – (22) (22) 22 – Balance at 30 June 2011 (unaudited)* 95 8,414 12,126 20,635 6,555 27,190 * The comparative information for the six months ended 30 June 2011 reflects adjustments made in connection with the completion of provisional accounting (refer to Note 6). The notes on pages 8 to 27 are an integral part of these interim condensed consolidated financial statements. 5 Open Joint Stock Company Russian Helicopters Interim consolidated statement of changes in equity (continued) For the six months ended 30 June 2012 In millions of Russian Roubles Equity attributable to the shareholder of the Company Revaluation of available-for- Non- Share Additional Retained sale controlling Notes capital paid-in capital earnings investments Total interests Total As at 1 January 2012 95 8,414 13,948 – 22,457 2,291 24,748 Profit for the period – – 2,968